ias 38 intangible assets questions and answers

Examples of intangible assets to be accoun… Definition of intangible asset 2. (8 marks) Required: Provide answers to the three queries raised by the chief executive officer. This chapter discusses the recognition and measurement of IAS 38 intangible assets. Road Map on IAS 38 1. Download all DipIFR course notes, track your progress, option to buy premium content and subscribe to eNewsletters and recaps. An asset is a resource controlled by the entity as a result of past events and from which future economic benefits are expected to flow to the entity. I have two questions regarding IAS 38 I was reading f7 bpp book and there is something which i couldnt understand at all from intangible chapter in Recognition of an expense topic Prepaid costs for services, for example advertising or marketing costs for campaigns that have been prepared but not launched, can still be recognised as a prepayment. Answer The following assets are tested for impairment under IAS 36: Goodwill 300, Intangible assets 750, Buildings 500, Machines 100, Total fixed assets 1,650, Question 2 Well NV owns an oil rig that has a carrying value of EUR 100 million. Example 2: Bad and doubtful debts. IAS 38 Intangible Assets outlines the accounting requirements for intangible assets, which are non-monetary assets which are without physical substance and identifiable (either being separable or arising from contractual or other legal rights). It requires an entity to recognise an intangible asset if, and only if, specified criteria are met. An intangible asset with a finite useful life is tested for impairment annually. Intangible assets meeting the relevant recognition criteria are initially measured at cost, subsequently measured at cost or using the revaluation model, and … Question 1 of 4 Which of the following is an objective of IAS 38? IAS 38 Intangible Assets IAS 38 Intangible Assets 2017 - 05 1 Objective The objective of this Standard is to prescribe the accounting treatment for intangible assets that are not dealt with specifically in another Standard. Earned Point(s): 0 of 0, (0) The cost of a separately acquired intangible asset can usually be measured reliably (IAS 38.26). The standard also prescribes the subsequent accounting treatment of intangible assets that satisfy the recognition criteria and are recognized in the statement of financial position. Measurement after recognition 5. Become a Financial Reporting Faculty member. IAS 38 Intangible Assets sets out the recognition criteria, measurement bases and disclosure requirements for intangible assets not dealt with specifically in another standard. And, IAS 38 expands this definition for intangible assets by specifying that on top of basic definition, an intangible asset is an identifiable non-monetary asset without physical substance. ANSWER –QUESTION 7: IAS 38 INTANGIBLE ASSETS Part (a) Following are the criteria that should be used while recognizing intangible assets from research and development work. And, IAS 38 expands this definition for intangible assets by specifying that on top of basic definition, an intangible asset is an identifiable non-monetary asset without physical substance. Under IAS 38, Intangible Assets are property that does not have a physical form but meets the three definition criteria: identifiable, controllable property that provides future economic benefits. •Professional Development will monitor quiz results and follow up with anyone who does not achieve a score of at least 8/10. is capable of being separated or divided from the entity and sold, transferred, licensed, rented or exchanged, either individually or together with a related contract, identifiable asset or liability, regardless IAS 38 – Intangible Assets Timeline and summary from Deloitte IAS Plus, with information on related interpretations and amendments under consideration. A long held principle of IAS 38 is that the majority of internally generated intangible assets cannot be capitalised. Also, explain how the criteria is applied to the recognition of separately purchased intangible assets, intangible assets acquired in a business combination and internally generated intangible assets. Provide answers to the issues raised by the managing director. – accounting for the different types of intangible asset acquired in a business combination; – the choice of accounting policy of cost or revaluation models, allowed under IAS 38 Intangible Assets for intangible assets; – the capitalisation of development expenditure. Recognition and measurement 3. Non-current Assets: Property, plant and equipment Right of use… Find out more about the benefits of membership and joining details. IAS 38 Intangible Assets Last updated: March 2017 RECOGNITION AND INITIAL MEASUREMENT This communication contains a general overview of the topic and is current as of March 31, 2017. You have already completed the quiz before. The results of the survey will only be accessible by Deloitte and your personal details will not be disclosed. Read IAS 38 Intangible Assets and Chapter 11 of Wiley IFRS 2019 and answer the following guide questions: 1. An intangible asset with an indefinite useful life is tested for impairment when indications exist Intangible assets, other than goodwill, acquired as part of an on-going business or acquired separately: a) Should be never amortised b) Should be amortised systematically over its estimated useful life They acknowledged though that providing the context no longer answers the question after the conclusion in respect of service vs. asset has been reached. According to IAS 38 - 'Intangible assets', which of the following statement (s) is (are) true? As mentioned earlier, IAS 38 provides application guidance for separate acquisition of intangible assets (IAS 38.25-32) and acquisition as part of a business combination (IAS 38.33-37). Hence $5 million needs to be charged to profit or loss to undo the reversal. Although you need not be a member to ask questions or provide answers, we invite you to register an account and be a member of our community for mutual help. Internally generated brands are often cited as the big example here, prohibiting entities from recognising items, due to their subjective and fluctuating nature. In your discussion, you are required to discuss IAS 38. Scope (6 marks). Under IAS 38.21, it puts down recognition criteria for intangible assets – An entity is required to recognise an intangible asset, whether purchased or self-created (at cost) if, and only if: It is probable that the future economic benefits that are attributable to the asset will flow to the entity; and Example 3: Bad and doubtful debts . Recognition of intangible assets. (i) No intangible asset arising from research shall be recognized. If you’re studying IAS 38 Intangible Assets, why not test your knowledge with our multiple choice quiz? Articles, Clarence Street, Dun Laoghaire, Co. Dublin, Ireland Accordingly, 0 Essay(s) Pending (Possible Point(s): 0). Click here to take the IAS 38 Quiz. An intangible asset is an identifiable non‐monetary asset of the entity without physical substance. If you’d like to keep improving your knowledge of IFRS, sign up for a subscription where you can access all our questions. To prescribe the accounting treatment for intangible assets that are dealt with specifically in another Standard To specify how to measure … Phone: +353 (0)1 4433 400 IAS 38 Intangible assets gives guidance on the accounting treatment for intangible assets that are not dealt with specifically in another standard. IAS 38 Intangible Assets sets out the recognition criteria, measurement bases and disclosure requirements for intangible assets not dealt with specifically in another standard. Some questions in this exercise may have more than one correct answer. The standard also specifies how to measure the carrying amount of intangible assets and requires specified disclosures about intangible assets. Judgement is needed to tell whether such intangible assets should be accounted for under IAS 38 or IAS 16. Separate acquisition of intangible assets. If you’re studying IAS 38 Intangible Assets, why not test your knowledge with our multiple choice quiz? It defines intangible asset as an identifiable non-monetary asset without physical substance. The objective of IAS 38 is to prescribe the accounting treatment for intangible assets that are not dealt with specifically in another Standard. We’d love to have you as a member; simply click here to find out more. This Standard requires an entity to recognise an intangible asset if, and only if, specified criteria are met. (a) Expenditure during the research phase of a project may sometimes be capitalised as an intangible asset (b) Expenditure during the development phase of a project may sometimes be … IAS 38 Intangible Assets outlines the accounting requirements for intangible assets, which are non-monetary assets which are without physical substance and identifiable (either being separable or arising from contractual or other legal rights). Some of them disagreed with removing the context about the analysis of IAS 38 vs. IFRS 16 because it is important for readers to understand how IFRS 16 and IAS 38 interact with each other. IAS 38 prescribes accounting treatment for all intangible assets that are not specifically covered elsewhere in IFRS. An intangible asset with an indefinite useful life is tested for impairment when indications exist It requires an entity to recognize an intangible asset upon fulfillment of certain recognition criteria. When can you recognise an IA and for how much. Examples include: patents, licenses, & … Intangible assets with indefinite useful lives 8. REVIEW TESST Question 1 0 out of 2 points IAS 38 Intangible Assets governs the accounting treatment of expenditure on research and development. Thank for trying this quiz. The results of the survey will only be accessible by Deloitte and your personal details will not be disclosed. ACCA FR Chapter 6 Intangible assets (IAS 38) Questions - Practice Questions - Chapter 6 Free ACCA Financial Reporting (FR) Tests. The standard also specifies how to measure the carrying amount of intangible assets and requires specified disclosures about intangible assets. According to IAS 38 - 'Intangible assets', what is the total cost that can be capitalised as an intangible fixed asset in respect of the new process? answered Mar 3, 2016 in IAS 38 - Intangible Assets by Tina Level 5 Member (11.6k points) 1 answer A firm implements ERP system in its entities over 2 yrs & capitalizes it centrally by the holding comp.When to amortize? INSTRUCTIONS: •Answer all questions on the quiz before submitting •A result of 8/10 is required in order to consider this complete. If an asset incorporates both intangible and tangible elements, it shall be treated under __________. Your participation in the survey is optional and you may refuse to answer any specific question or exit the entire survey at any time. Answer The following assets are tested for impairment under IAS 36: Goodwill 300, Intangible assets 750, Buildings 500, Machines 100, Total fixed assets 1,650, Question 2 Well NV owns an oil rig that has a carrying value of EUR 100 million. 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